Unfortunately that a Felling and Pelaw residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Felling and Pelaw property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining slips below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of flat owners in Felling and Pelaw will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
It is generally considered that a residential leasehold with more than 100 years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Felling and Pelaw lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Two years ago Aarav, started to get near to the eighty-year mark with the lease on his garden apartment in Felling and Pelaw. In buying his flat twenty years ago, the length of the lease was of minimal relevance. Fortunately, he noticed he needed to take steps soon on Extending the lease. Aarav arranged for a lease extension just in the nick of time in September. Aarav and the landlord ultimately agreed on a premium of £5,000 . If the lease had slipped lower than eighty years, the sum would have become more costly by a minimum £1,125.
In 2009 we were contacted by Mr Eliot Allen who, having acquired a basement apartment in Felling and Pelaw in September 2010. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparable properties in Felling and Pelaw with 100 year plus lease were in the region of £290,000. The average amount of ground rent was £45 invoiced quarterly. The lease elapsed in 2098. Taking into account 72 years as a residual term we approximated the premium to the freeholder to extend the lease to be between £11,400 and £13,200 exclusive of legals.
Last Winter we were e-mailed by Mr J Jackson , who bought a ground floor flat in Felling and Pelaw in July 2005. The question was if we could approximate the price would be for a 90 year lease extension. Similar homes in Felling and Pelaw with 100 year plus lease were worth £233,200. The mid-range ground rent payable was £60 billed monthly. The lease expired on 7 September 2087. Having 61 years unexpired we calculated the compensation to the landlord for the lease extension to be between £22,800 and £26,400 exclusive of professional charges.